The consensus 2021 S&P 500 EPS estimate has quietly climbed from ~$165 to ~$168 over the last three weeks. Without any positive impact from fiscal stimulus or vaccines, the number seems destined to surpass $170 by the end of the CQ3 earnings season. Analysts typically
Anticipation of sharply higher government spending under a Biden + Democrat sweep has led to a relatively significant increase in bond yields. Since last Wednesday 9/30, 10-year Treasury yields have increased 21%, rising from ~0.65% to ~0.79% yesterday.
Yesterday’s House antitrust announcement aimed at GOOGL, AMZN, FB and AAPL (consumer focused) has been in the works for more than a year and expected. The government feels these businesses are monopolies and wield too much power around distribution, market power and pricing.
: We continue to expect a successful test of the 9/2 record high before year end with cyclical/value leadership under any election scenario. Equity positioning remains light among individual investors, long-only managers, hedge funds and systematic funds. Elevated bearish equity sentiment is also supportive.
The pullback in the S&P 500 (SPX) and NASDAQ 100 (NDX) started on 9/3 after CIEN issued unusually bad guidance. Since that day, the NDX has underperformed the SPX by ~300bps and the S&P 500 Value Index (SVX) by ~550bps.
: September headline net job additions missed, coming in at +661,000 vs consensus for +850,000 but other components of the report were solid. Private payrolls increased +877,000 vs consensus for +850,000 and the Unemployment Rate fell to 7.9% vs consensus for 8.2%, but maybe for
The CQ2 earnings season was far better than expected and it’s difficult not to be upbeat about the performance of corporate America during the pandemic. The CQ3 earnings season that kicks off on 10/13 should provide welcome fundamental clarity on business conditions into Q4.
The US ADP jobs report for September was solid at +749,000 vs consensus for 649,000 and up from 481,000 in August. This report always precedes the official monthly Jobs Report by two days. The two reports have a weak positive correlation, but the beat today
: Global manufacturing PMI crossed into expansion territory in July at 50.6 and extended to 51.8 in August. China doesn’t report flash PMIs, but last week’s data from Japan, Eurozone, UK and US imply higher levels.
Last week, many economists finally removed near-term fiscal stimulus from their Q4 GDP growth estimates. The estimated $1T-$1.5T fiscal package would have been 5 of GDP, which is a very big number and you’d think removing something that large would create a massive change to
